Correlation Between Mohawk Industries and Hamilton Beach
Can any of the company-specific risk be diversified away by investing in both Mohawk Industries and Hamilton Beach at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mohawk Industries and Hamilton Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mohawk Industries and Hamilton Beach Brands, you can compare the effects of market volatilities on Mohawk Industries and Hamilton Beach and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mohawk Industries with a short position of Hamilton Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mohawk Industries and Hamilton Beach.
Diversification Opportunities for Mohawk Industries and Hamilton Beach
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mohawk and Hamilton is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mohawk Industries and Hamilton Beach Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Beach Brands and Mohawk Industries is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mohawk Industries are associated (or correlated) with Hamilton Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Beach Brands has no effect on the direction of Mohawk Industries i.e., Mohawk Industries and Hamilton Beach go up and down completely randomly.
Pair Corralation between Mohawk Industries and Hamilton Beach
Considering the 90-day investment horizon Mohawk Industries is expected to generate 0.56 times more return on investment than Hamilton Beach. However, Mohawk Industries is 1.78 times less risky than Hamilton Beach. It trades about 0.34 of its potential returns per unit of risk. Hamilton Beach Brands is currently generating about 0.13 per unit of risk. If you would invest 11,682 in Mohawk Industries on October 20, 2024 and sell it today you would earn a total of 1,245 from holding Mohawk Industries or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mohawk Industries vs. Hamilton Beach Brands
Performance |
| Timeline |
| Mohawk Industries |
| Hamilton Beach Brands |
Mohawk Industries and Hamilton Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mohawk Industries and Hamilton Beach
The main advantage of trading using opposite Mohawk Industries and Hamilton Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mohawk Industries position performs unexpectedly, Hamilton Beach can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hamilton Beach will offset losses from the drop in Hamilton Beach's long position.| Mohawk Industries vs. Bassett Furniture Industries | Mohawk Industries vs. Ethan Allen Interiors | Mohawk Industries vs. Natuzzi SpA | Mohawk Industries vs. Flexsteel Industries |
| Hamilton Beach vs. Bassett Furniture Industries | Hamilton Beach vs. Flexsteel Industries | Hamilton Beach vs. Natuzzi SpA | Hamilton Beach vs. La Z Boy Incorporated |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |